Bihar introduces professional tax

By jpgupta |

30th March 2011

Bihar government has decided to impose professional tax on the officers and employees of the central and the state government, boards and corporations on the pattern of Maharashtra, West Bengal and other states. The State Assembly on Tuesday passed the Bihar Profession, Trade, Livelihood and Employment Tax Bill, 2011, paving the way for the imposition of the tax.

Patna: Bihar government has decided to impose professional tax on the officers and employees of the central and the state government, boards and corporations on the pattern of Maharashtra, West Bengal and other states.

The State Assembly on Tuesday passed the Bihar Profession, Trade, Livelihood and Employment Tax Bill, 2011, paving the way for the imposition of the tax.

The Bill would come into force from the date of its notification in the state gazette, the sources said adding salaried professionals earning more than Rs 3 lakh per annum would come under the ambit of the new legislation.

Those earning between Rs 3 lakh and Rs 5 lakh would pay an annual professional tax of Rs 1000 while those earning between 5 lakh and Rs 10 lakh will have to pay Rs 2000. Employees getting above Rs 10 lakh per annum will pay Rs 2500, authoritative sources said.

The employers will collect the professional tax from salaried people working in private firms or government as per the TDS (Tax Deducted at source) module. Self-employed professionals like doctors, lawyers and accountants would also be brought into the professional tax net.

Under the provisions of the new legislation, the Commercial Taxes Department would henceforth be the nodal body to collect the professional tax instead of municipal bodies, which hitherto collected the professional tax in their respective domains.

In case of default, an employee would be liable to a fine of two per cent at simple interest rate per month on the outstanding amount, the sources said.

The employer or an employee would be liable for three months simple imprisonment or a fine of Rs 5000 in case of violation of the rules without assigning any valid reason.